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Sunday, April 06, 2008

Prof. Bharat Seth on SEZs

From Lok Raj Sangathan web-page, reproduced here for your convenience. The original link is here.

Scrap all Approvals for SEZs

By Prof Bharat Seth

The fact that what exists in India is not people's rule is evident from the way minority vested interests are dictating the terms of economic development. What we are seeing is a rapid growth of economy with huge profits for the big industrial houses, side by side with increasing exploitation of toilers in the cities and in the countryside. The latest push to accelerate this trend is the establishment of Special Economic Zones or SEZs.

Since 2006, the government has been approving SEZs after SEZs in different parts of India. At the beginning of 2007, there were already 181 formal approvals and 128 more were in-principle approved. The total area occupied by these 309 SEZs is 1,25,000 hectares, which is the area of Delhi state. During 2007 almost 100 more SEZs were approved. Amongst the biggest SEZs are Reliance Haryana SEZ with 25,000 acres of land and Reliance Maharashtra SEZ with 13,000 acres. The bulk of the land for SEZs is acquired by the government and its agencies. For example, the Reliance Maharashtra SEZ land is to be acquired by CIDCO. Land for the Singur and Nandigrapm SEZs was to be acquired in a similar manner by the West Bengal Left Front government. The agencies responsible for the land acquisition are using the colonial Land Acquisition Act, according to which, the government has the right to acquire any land for public purpose. Although, the SEZs are clearly owned by private parties, various apologists are trying to argue that SEZs are in public interest and the government is trying to expand the scope of the Land Acquisition Act.

In many regards, a SEZ is considered to be a foreign territory. For example, an industrialist will have to pay no import duties or excise for goods imported and produced there. However, they are required to export only 1% of products produced in the SEZ. In addition, they will get 100% income tax exemption for 5 years. For the next 5 years, they are required to pay only half the tax. This tax reduction is applicable for another 5 years if profits are ploughed back in the SEZ.

In order for unhindered exploitation of working people, labour laws are not directly applicable in SEZs. The functions of the Labour Commissioner and Labour courts, etc. are taken over by the Development Officer of the SEZ. However, it is an open secret, that Development Officers are openly pro-industrialists and toilers cannot hope to get their labour rights defended by the Development Officer. The owners of the industrialist and service units in the SEZ are given various subsidies.

There are huge subsidies for the developers of the SEZ also. Apart from the fact that they get ownership of precious land resources, they can also claim any 10 years of the first 15 years for tax holiday. They also get unrestricted use of half the land of SEZ, in which they can develop real estate for profit.

It is abundantly clear that SEZs are a way to attack the livelihood of peasants and evict them from their land. Peasants land is bound to get into the hands of the capitalists. Similarly they are a devious way to launch an attack on the rights of working class such as 8-hour workday, arbitrary dismissals, depriving them of their unions, etc. It is not only an attack on the workers working in companies located in the SEZ but also on all other workers as the owners will threaten the workers that their units will also be shifted to SEZs if they demanded too many rights.

In the aftermath of the vigorous resistance by the people in different parts, the Central government had to put a freeze on further approvals of SEZs. However, this freeze did not last more than 75 days. The government lifted the freeze with only some minor and ineffective measures. These included i) reduction of maximum land for multi-product SEZ to 5000 hectares, ii) requirement that at least half the areas be used for production and iii) the advice to the state governments not to acquire agriculture lands.

People are fully justified in continuing their protests. Due to people's opposition in Goa, the government has been forced to scrap all 15 approvals of SEZs in spite of the fact that three of these had already been notified. This is bound to inspire workers and peasants in other states to continue and accelerate their protests against SEZs to protect their livelihood.

The attack in not limited to workers and peasants but spills over to general issue of food security of the society as well as to loss of livelihood of agricultural workers, village artisans and other support people. Cultivable land has to be protected. It is clear that the government has no intention to scrap the colonial land acquisition act. To prevent farmers being deprived of their land, it is necessary to demand that there should be a ban on buying and selling of farm land and that land not be treated as a commodity. In fact, we should demand that land privately held should be converted into public land. And, that the market forces not be allowed to operate in the dealing with land.